Monday, December 14, 2015

Time for a Cage Match

Apologies to the fans fan of this blog (Hi Mom!) for not posting in such a long time. Between Thanksgiving and winding up the school term, it's been pretty haywire. But the final exam has been written, (not proctored - that comes Wednesday) and then it's just a matter of final grades, although I am taking advantage of the break to start working on lecture notes for next semester.

But I have a great welcome back item - the announced merger of Dow and DuPont. Both of these companies have a lot in common. They are both huge. Their names both start with the letter "D". And they both have had to put up with activist investors in the last year or two.

Dow was the first to be attacked from "within", in this case by Daniel Loeb (1, 2, 3, 4, 5 and 6). That all ended when Dow and Loeb and declared a truce just over a year-ago. In a classic case of monkey-see, monkey-do (a phrase that in this case insults monkeys, even really dumb monkeys), Dupont was then attacked from within by Nelson Peltz (1, 2, 3 and 4) before finally losing his proxy battle.

But both of these guys are still hanging around the picture, which then raises the biggest question in my mind about the merger: which activist investor will be the top dog afterwards? Everyone is far more concerned concerned about government approval for the deal, but what about the undercard: Loeb vs. Peltz? As big as this new company will be, it still will not be big enough for these two mega-egos. One of them will have to go.

My proposal: a cage match!

Which company had the better activist investor? This would be the once-in-a-lifetime chance to find out. Imagine the pay-per-view revenue. Wall Street bankers, financiers and countless C-Executives (especially ones previously harassed by these two) would pay thousands to watch this. Mayweather vs. Pacquiaou pulled in $410 millions - this could double that and give me enough cash that I could become an activist investor! The bookies would have Loeb as the early favorite as he is a sprite 53 years (turning 54 later this week) while Peltz is almost 20 years his senior, but when big money like this is at stake, these guys would be as ferocious as 2 emaciated tigers fighting over a fattened lamb.

"Grace, get me Loeb on the phone right away. Oh, and start dialing up that Peltz guy too. We're going to do lunch..."